1. An ad-hoc network is a local area network (LAN) that is built spontaneously as devices connect. Instead of relying on a base station to coordinate the flow of messages to each node in the network, the individual network nodes forward packets to and from each other. In Latin, ad hoc literally means "for this," meaning "for this special purpose" and also, by extension, improvised or impromptu.
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2. In the Windows operating system, ad-hoc is a communication mode (setting) that allows computers to directly communicate with each other without a router.
See also: peer-to-peer
The University of Washington website has directions for setting up a Windows ad-hoc network.
Brian Posey explains the security risks associated with ad hoc networks.
Lisa Phifer answers the question What are the pros and cons of ad hoc connections versus access points?